Payroll Software References: Getting the Scoop on Your Vendor

References for Payroll Software: Getting to Know Your Vendor

It’s hard to argue that the primary focus in the payroll software selection process tends to be on functionality (including its alignment to business needs) and cost. As such, when attention is finally paid to the payroll software vendor company itself, the questions often revolve around stability and competence, rather than the previous implementations that company has gone through with other clients. And it’s not hard to see why. Following up on references and testimonials is tedious, and far less glamorous than say, attending the payroll software demo.

One reason references are treated as low priority is the assumption that a vendor will only point you towards their fan club; and as Clay Scroggin of CompareHRIS.com points out, “How valuable are references if the HR software companies are handpicking them”? Still, the fact of the matter is that checking out a payroll vendor’s current as well as previous customers, can add valuable additional information to the decision process at a relatively low-cost. But which customers should be contacted? When in the process should this reference checking take place? What are you even supposed to ask?

Payroll Software References Question #1: Who Do You Contact?

Well, in a perfect world, you’d be able to contact a company just like your own; identical in terms of industry vertical, number of employees and size of business and a comparable future strategy. Of course, this means you might well be discussing the software with a competitor but hopefully that doesn’t have to get in the way of the conversation. Since we don’t live in the ideal world though, rather than allow the vendor to stack the deck in terms of their best implementation customers, draw up a profile of the ideal company from whom you’d like to hear a reference. Then, when you have some likely prospects, have each member of your software project steering committee talk to their respective position in the referring company. This broadens the scope of opinion, allows everyone to talk about what they know best, and enables the committee to compare notes and come with the full picture of the other company’s experience with the software.

Of course to jump back over to that “ideal” scenario, there is always the option of sidestepping the handpicking of references by looking for other companies who use that particular software and cold-calling them. Handled correctly, they may be more than willing to discuss how their use the application and how it has (or has not) benefited them. It should be noted though that this is not always the most reliable method.

Payroll Software References Question #2: When Should Checks Take Place?

As the On-line Consultant Software Selection website (olcsoft.com) suggests, “Reference checks can be performed at different points in the selection process”. Indeed, according to this stellar reference resource, “You can wait until you have already made a decision and use the reference check as a confirmation of your choice, or you can make the reference check part of your decision matrix”. Naturally, if reference checking is part of the decision process rather than simply a “rubber stamp” procedure, then questions will have to be standardized and weighted in accordance to the evaluation tool that you are using to compare the different vendor offerings. At whichever point you make the calls though, it’s always wise to restrict this type of assessment to the final two or three contenders to avoid an overly time-consuming process.

Payroll Software References Question #3: What to Ask?

Questions should be open and asked in a manner that will elicit the maximum information; and as such yes/no answers should be avoided if at all possible due to their limited value. The key is not to attempt to test the software itself all over again. Reference checking is about discovering not what the vendor delivers but how it delivers it. Useful areas to ask about include:

Ability of vendor to meet schedules and deadlines

Attitude of vendor staff (friendly, adversarial, etc.)

Performance of implementation team

Quality of training

Problems during implementation (and how they were resolved)

Customization issues

Hidden costs

How bugs are handled

How new releases / upgrades are handled

Vendor responsiveness to support and maintenance problems

Different members of the steering committee or project team may narrow these questions down or ask others depending on their role and function. However, the questions asked of each referee must be sufficiently consistent so that the responses can be meaningfully aggregated, compared, and used as part of the due diligence of the payroll software pre-selection process.

Checking Payroll Vendor References – A Final Thought

Olcsoft.com quite rightly recommends that your final, parting question be along the lines of, "If you had it to do all over again, would you still choose the same company?" Even a referee that has been lukewarm in their endorsement may still answer “yes” because of factors that have not been discussed and this last question can be an opportunity to summarize and clarify their position. In addition, remember that if you happen to talk to a previous customer who is dissatisfied with the software or the vendor (or both) it does not automatically mean that the vendor’s product is wrong for you. Find out what the source of the dissatisfaction is and what specific problems occurred. Payroll software implementation can fail for a variety of reasons and not all of them are down to the vendor. For example, it may be that the purchasing organization chose the wrong application for their needs; or perhaps they failed to commit enough resources to the project; or maybe they just simply lacked C-suite buy-in. Ultimately though, it is the quality, depth, and honesty of the reference checking conversation that results in useful information. After all, you’re looking for the full picture to add to your deliberations and not a simple box-ticking exercise.